In recent years, evidence has accumulated indicating that naturally occurring regulatory cells producing TGF-beta and/or IL-10 can prevent or even reverse Th1 cell-mediated inflammation. To take advantage of this finding for the treatment of Th1-mediated mucosal inflammation, we previously developed a method of creating "genetically-engineered" regulatory cells in vivo by direct introduction of DNA encoding a regulatory cytokine, TGF-beta1. In this method the TGF-beta1-encoding DNA (in the form of a plasmid) is instilled into the nose and is either taken up by migrating cells in the nasal mucosa or by cells at distant sites exposed to plasmid that gains access to the circulation. In either case, cells (both T cells and macrophages) producing TGF-beta1 can subsequently be found in the gastrointestinal tract, where they they either prevent colitis caused by intrarectal administration of trinitrobenzene sulfonic acid (TNBS), or treat such colitis after it is established. One unexpected finding arising from this method of inducing TGF-beta1-producing cells is that, at sites of inflammation, T cells producing large amounts of IL-10 are also found, and both cytokines participate in the regulatory effect. This observation is consonant with previous findings showing that TGF-beta1 and IL-10 secretion tends to occur together at site of inflammation . In the present study, we sought to determine the molecular and cellular basis of this association and to examine its clinical consequences. In initial studies we developed a one gene doxycycline (Dox)-inducible plasmid encoding TGF-beta1 and then showed that intranasal administration of this plasmid led to the appearance of TGF-beta1-producing cells (in spleen and lamina propria), but only if plasmid was administered along with dox. In fact, TGF-beta1 production was very sensitive to the presence of dox as indicated by data showing that plasmid administration followed by delayed dox administration led to TGF-beta1 production only upon dox administration and such production rapidly ceased once dox was withdrawn. This system allowed us to further establish the temporal relation between TGF-beta1 production and IL-10 production and, indeed, we found that TGF-beta1 production was rapidly followed by IL-10 production, but that IL-10 production persisted after TGF-beta1 production had turned off. Finally, we showed in studies in which TGF-beta1 constructs were expressed in various cell types by either transfection or (retroviral) infection, that IL-10 was only produced in lymphocytes and macrophages, not epithelial cells or fibroblasts. In further studies we showed that TGF-beta1 secreting cells induced in the nasal area exert Dox-regulated suppression of the Th1-mediated inflammation of TNBS-colitis, when administered prior to onset of inflammation and after inflammation is established. Thus the TGF-beta1/IL-10 induction has a therapeutic potential. In subsequent in vitro studies employing retroviral TGF-beta1 expression, we established that IL-10 production by Th1 cells occurs following exposure to TGF-beta1 from either an endogenous or exogenous source. In addition we showed using a self-inactivating retrovirus luciferase reporter construct that TGF-beta1 induces Smad4 which then binds to and activates the IL-10 promoter. The direct relationship between TGF-beta1 and IL-10 production revealed in these studies appears to be necessary for TGF-beta1 regulatory function and to prevent TGF-beta1-mediated fibrosis. The latter was shown by the fact that intranasal TGF-beta1 plasmid administration ameliorates bleomycin-induced fibrosis in wild-type, but not in IL-10-deficient mice, strongly suggesting that the amelioration is IL-10 dependent and that IL-10 protects mice from TGF-beta1-mediated fibrosis. Taken together, these findings suggest that the induction of IL-10 by TGF-beta1 is not fortuitous, but instead fulfills important requirements of TGF-beta1 function following its secretion by regulatory T cells.